Bitcoin’s latest stumble to the $113K range has triggered a dramatic shift in sentiment among retail traders, with social media showing the most bearish outlook since late June. According to on-chain analytics firm Santiment, many small investors have effectively thrown in the towel after repeated failed rallies, flooding the market with bearish sentiment. 😨 Retail traders have done a complete 180 after Bitcoin has failed to rally and dipped below $113K. The past 24 hours have marked the most bearish sentiment seen on social media since the June 22nd fears of war caused a cascade of panic sells.🩸 Historically, this negative… pic.twitter.com/UYKOpWoOkn — Santiment (@santimentfeed) August 20, 2025 Fear Can Be Just As Bullish But if you’re a contrarian trader, this might be the signal you’ve been waiting for. Historically, these moments of mass retail capitulation have often paved the way for sharp rebounds, as the market tends to move against the crowd. When traders begin to expect only downside, patient investors who accumulate during the panic often find themselves on the right side of the next trend. Santiment’s data suggests that retail fear has now reached a level that is typically associated with short-term market bottoms. Related: Canada’s RBC Increases Investment in Bitcoin Proxy Strategy to $76M in Q2 The Whale “Leverage Trap” While retail is panicking, however, the “smart money” tells a different story. Research from XWIN Japan highlights a tug-of-war between speculative leverage and institutional demand. Open Interest has climbed past $40 billion, and funding rates remain firmly positive. This suggests that while retail traders are fearful, whales and leveraged players are still aggressively betting on a move higher. The danger, of course, is that this excessive leverage can become a trap. A sudden dip can unleash a cascade of liquidations, which would exaggerate any price decline in the short term. The Institutional Counterweight This speculative activity is happening as the long-term institutional bid for Bitcoin continues. Exchange-traded funds and corporate treasuries now collectively hold over 1.3 million BTC, slowly but consistently absorbing supply. The accumulation acts as a counterweight to speculative excess and provides a structural floor for Bitcoin’s long-term trajectory. Related: Bitcoin Tipping Now Available on Elon Musk’s X via BitBit Integration Speculative traders may dictate near-term volatility, but institutional inflows continue to anchor the broader uptrend, highlighted XWIN Japan in the CryptoQuant post. Temporary Slowdown Before Renewed Strength Analyst CQ Ben pointed out that in both of the past two bull markets, Bitcoin showed weakness around 480 days after the halving event, only to recover and accelerate toward new highs by around day 510. If the pattern repeats, the current pullback could linger for another two to four weeks before giving way to a rally heading into late September and early October. Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.